- Residential property transaction volume reached €1.65 billion in Q3 2026.
- Cumulative volume for Q1-Q3 2026 totalled €5.75 billion, down just 1.6% year-on-year (Q1-Q3 2025: €5.84 billion).
- Prime yield remains stable at 3.80% despite higher financing costs.
Cushman & Wakefield recorded a transaction volume of €1.65 billion in the German residential investment market during the third quarter of 2026. This represents a decline of around 17% compared with the same quarter last year (€1.99 billion) and approximately 26% below the strong second quarter of 2026 (€2.22 billion). Cumulative transaction volume for the first three quarters of 2026 reached €5.75 billion, resulting in an almost stable performance compared with the same period of the previous year (€5.84 billion; down 1.6%).
Jan-Bastian Knod, Head of Residential Investment Germany at Cushman & Wakefield, commented: “The third quarter of 2026 was characterised by a more selective investment environment. Higher financing costs have led to delays in transaction processes. At the same time, the significant share of portfolio transactions demonstrates that large-scale capital, particularly from international sources, continues to target the German residential market strategically.”
Portfolio Transactions Overtake Single-Asset Deals for the First Time in 2026 as International Capital Remains Active
While single-asset transactions dominated the German residential investment market during the first half of 2026, portfolio transactions accounted for the majority of activity in the third quarter, representing €965 million, or 59% of total transaction volume. Compared with the same quarter of the previous year (€755 million), this equates to an increase of almost 28% in portfolio transaction volume alone.
Local portfolios (€487 million) and nationwide portfolios (€478 million) contributed almost equally to this total. By contrast, single-asset transactions amounted to €684 million, compared with €1.23 billion in the third quarter of 2025.
Jan-Bastian Knod added:“The pattern observed in the previous quarter continued. International capital remains focused on large-scale, geographically diversified portfolios and development projects, while domestic investors are primarily targeting local portfolios and individual assets."
The largest transaction of the quarter was completed by Net Zero Properties, who acquired the so-called Polarlicht Portfolio from DWS. The portfolio comprises approximately 5,600 residential units and around 333,000 sq m of lettable space across five locations in Schleswig-Holstein and Lower Saxony, including Flensburg, Neumünster and Bremerhaven. According to media reports, the purchase price amounted to approximately €350 million.
International capital was also active in the development segment. M&G Real Estate acquired a new-build residential scheme comprising 145 rental apartments on Landsberger Allee in Berlin through a forward-funding structure on behalf of the M&G European Property Fund for €56 million. Completion is scheduled for the end of 2027.
Knod said: “This underlines the growing attractiveness of forward deals for institutional investors seeking early access to high-quality newly developed residential product.”
Overall, international investors deployed €618 million into German residential investments during the third quarter of 2026, representing approximately 38% of total transaction volume. While slightly below the previous quarter's share of 40%, this figure is more than double the level recorded in the third quarter of 2025 (17%). Investments backed by domestic capital totalled €1.03 billion, accounting for 62.5% of overall activity.
Since the beginning of the year, international investors have accounted for €1.98 billion, representing 34% of total transaction volume.
Student and Micro-Living: Transaction Volume Remains Subdued
The recovery anticipated for the student and micro-living sector in the second half of 2026 has yet to materialise through larger transactions in the third quarter. Only around €20 million was recorded during the quarter, bringing the total transaction volume for purpose-built student accommodation since the start of the year to €91 million. Among the transactions completed was the sale of two student residences in Greifswald, comprising a total of 176 apartments, to a private investor.
Development Projects: Growing Investor Interest as Several Development Sites Change Hands
Noteworthy developments include the sale of several sites earmarked for student living schemes. Most prominent was the acquisition by Artprojekt of five centrally located sites in Berlin, where, alongside conventional rental housing, student accommodation and serviced apartments are planned.
Prior to this, Cushman & Wakefield advised BME Group on the sale of a development site at Lützowstraße 74 in Berlin-Tiergarten to J.P. Morgan Asset Management, acting in a joint venture with iLive. The project envisages the construction of a student residence with 350 rooms, with completion expected in 2029.Another development site was acquired by Amro Partners at Wisbyer Straße 38 in Berlin-Prenzlauer Berg. The scheme is planned to deliver 450 student beds. Cushman & Wakefield also acted as adviser on this transaction.
Jan-Bastian Knod continued: “International investor appetite for student accommodation and micro-living remains strong. However, in light of higher financing costs, both projects and platform investments are being scrutinised much more closely, resulting in longer decision-making processes. We expect ongoing transactions to translate into higher volumes with a time lag. Newly established investment platforms are also likely to contribute to a gradual increase in market activity.”
Jan-Bastian Knod concluded: “Despite lower transaction volumes in the third quarter, the residential investment market remains in solid shape. After nine months, activity is broadly in line with last year's level, while large-scale portfolio transactions are once again being completed. Investors are acting with greater discipline, and financing conditions are increasingly determining which transactions ultimately proceed. This will be a key factor in the final quarter of 2026 and will continue to shape market activity next year.”
According to Cushman & Wakefield, the prime yield for multifamily residential assets is expected to remain stable for the time being at 3.80%.
